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STATE OF TENNESSEE
WORKERS COMPENSATION ADVISORY COUNCIL
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ANALYSES AND COMMENTSre:
WORKERS COMPENSATION LEGISLATION~2007~
PROVIDED TO:SENATE COMMERCE AND AGRICULTURE COMMITTEE
ANDHOUSE CONSUMER AND EMPLOYEE AFFAIRS COMMITTEE
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March, 2007
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
WORKERS COMPENSATION ADVISORY COUNCIL
~~~~~~~~~~~~~~~~
ANALYSES AND COMMENTSre:
WORKERS COMPENSATION LEGISLATION~2007~
PROVIDED TO:SENATE COMMERCE AND AGRICULTURE COMMITTEE
ANDHOUSE CONSUMER AND EMPLOYEE AFFAIRS COMMITTEE
March, 2007
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TABLE OF CONTENTS
Numerical Index of Senate
Bills......................................... 3
Numerical Index of House
Bills......................................... 4
Bill Analyses and Comments of Members ........................
13
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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NUMERICAL INDEX OF SENATE BILLS
SB# SPONSOR PAGE #
0149 Southerland............... 13
0253 Haynes...................... 19
0313 Finney, R.................. 29
0322 Haynes...................... 34
0366 Southerland.............. 24
0425 Crutchfield............... 37
0445 Burchett................... 31
0446 Burchett................... 61
0496 Burchett................... 79
0849 Kilby....................... 39
0857 Kilby....................... 41
1043 Finney, L................. 62
1044 Finney, L................. 43
1222 Cooper.................... 63
1473 Tracy....................... 64
1474 McNally.................. 30
1477 Tracy....................... 53
1672 Ramsey................... 45
1745 Ketron..................... 66
1746 Ketron..................... 68
1747 Ketron..................... 75
1748 Ketron..................... 72
1749 Ketron..................... 73
1762 Kyle........................ 15
1775 Southerland............ 46
1797 Southerland............ 49
1805 Tracy...................... 55
1884 Jackson.................. 65
2171 Kyle....................... 16
2241 Kyle....................... 17
2259 Kyle....................... 59
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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NUMERICAL INDEX OF HOUSE BILLS
HB# SPONSOR PAGE #
0073 Turner, M................. 19
0247 Hensley.................... 29 CAPTION HELD O N HO USE
DESK
0278 Mumpower.............. 45
0454 Hackworth............... 31
0595 Turner, M................. 62
0643 Turner, M................. 41
0655 Hawk........................ 24
1073 Turner, M................. 39
1081 Turner, M................. 43
1138 Buck......................... 65
1319 West......................... 13
1518 Hackworth............... 30
1563 Curtiss..................... 64
1568 Curtiss..................... 53
1569 Curtiss..................... 55 REF TO GOVT OPS FOR REVIEW
- C&EEAFFAIRS
1571 Curtiss..................... 63 CAPTION HELD O N HO USE
DESK
1603 Overbey................... 79
1635 Ferguson.................. 61 CAPTION HELD O N HO USE
DESK
1642 Mumpower.............. 68
1643 Mumpower.............. 75 REF TO GOVT OPS FOR REVIEW -
C&EEAFFAIRS
1644 Mumpower.............. 73
1645 Mumpower.............. 72
1646 Mumpower.............. 66
1813 McDonald/Odom.... 16
1818 Hackworth............... 34
1822 Buck........................ 37
1862 Shepard................... 15
2128 Fitzhugh.................. 46
2129 Fitzhugh.................. 49
2307 Turner, M./Odom.... 59
2322 Odom...................... 17
*0613 Turner, M.......No Senate Sponsor - appears to be same as
SB1044/HB1081 - see p. 43
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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TABLE OF BILLS - AMENDMENTS EXPECTED or CAPTION BILLS[Analyses
Of These Bills Begin On Page 66.]
At the meeting of the Advisory Council on Friday, March 16,
2007, either a sponsor of the bill ora representative of the
interested party who is supporting the bill indicated amendments
wereexpected if the bill was pursued or that the bill was a caption
bill. Therefore, the members of theAdvisory Council decided it
would be best to defer specific comments on the following bills.
TheAdvisory Council requested its Executive Director to include in
the report to the StandingCommittees the description and analysis
of the bills, as currently drafted, for the benefit of those whomay
be interested in the current bills.
BILLS FOR WHICH
AMENDMENT IS
EXPECTED
- Sen. Ketron & Rep.
Mumpower
pp. 66 - 78
.
SB# Sponsor HB# Sponsor DESCRIPTION
1745
p. 66
Ketron 1646 Mumpower >Requires a sole proprietor or
partner to file written notice with the
Division of Work Comp as to
decision to be covered or not
covered as an employee
>For those in construction industry,
they must file election not to be
covered by workers comp to be
exempt from the law
1746
p. 68
Ketron 1642 Mumpower Changes criteria for determining
whether one is employee or
independent contractor
-conclusive presumption of
independent contractor if certain
documents are provided; but,
maintains statutory criteria if unable
to provide the documents
1748
p. 72
Ketron 1645 Mumpower Requires sole proprietors and
partners to carry workers
compensation insurance on
themselves
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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1749
p, 73
Ketron 1644 Mumpower Provides principal or general
contractor not liable for injuries to
sole proprietor or partners who fail
to elect to be covered for work
comp purposes; requires
certification of noncoverage from
dept which is conclusive proof of
noncoverage;
1747
p. 75
Ketron 1643 Mumpower Creates Workers Compensation
Insurance Board to hear appeals of
complaints by those aggrieved by
application of the work comp rating
system after first considered by the
insurer. Appeals from Board
decision go to Commissioner
BILL INDICATED AS
CAPTION BILL BY
TN. HOSPITAL
ASSOCIATION REPS
- Sen. Burchett & Rep.
Overbey
pp. 79 - 80
496
p. 79
Burchett 1603 Overbey Requires Commr of Labor/WFD to
promulgate rules to establish civil
penalty against provider found to
have fraudulently billed and
collected amount in excess of the
medical fee schedule
Senator Ketron was present and discussed the five (5) bills he
and Rep. Mumpower are sponsoring:
SB 1745 / HB 1646;SB 1746 / HB 1642; SB 1748 / HB 1645;SB 1749 /
HB 1644 ; and SB 1747 / HB 1643.
Senator Ketron explained the first four bills pertain to the
issue of independent contractors and how
they are treated for workers compensation purposes - by the
insurance industry, by the courts and
by the administrative agencies. Senator Ketron stated the first
four bills present four different
methods of dealing with the problem. He said he and Rep.
Mumpower want to continue working
with the interested parties on this issue and, therefore, these
four bills will probably be replaced with
an amendment to address the problem about which the interested
parties can agree.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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Senator Ketron stated SB 1747 / HB 1643, which creates a Workers
Compensation Appeals Board,
will be amended after an opportunity to meet with the Department
of Commerce and Insurance. The
members of the Advisory Council agreed the issue of independent
contractors is a big issue that
needs to be addressed. The members directed staff to include the
description and analysis of these
bills in the report to the Standing Committees with the notation
that the Advisory Council will be
available to consider any proposed amendment after the sponsors
have had an opportunity to meet
with the industry and departments to determine the best way to
address the problem.
With regard to SB 1747 /HB 1643, the Advisory Council agreed to
defer discussion and
consideration of the bill until the sponsors have an opportunity
to meet with Department of
Commerce & Insurance personnel to craft an amendment.
With regard to SB 496(Burchett)/HB1603(Overbey), representatives
of the Tennessee Hospital
Association stated at the Advisory Council meeting that this
bill was filed as a caption bill.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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TABLE OF BILLS REVIEWED BY ADVISORY COUNCIL
(BY SUBJECT MATTER)
NOTE: The description of the bill in the following table is a
limited description and does not
describe all aspects of the bill.
INSURANCE &
INSURANCE
RATES
pp. 13 - 18
SB# Sponsor HB# Sponsor DESCRIPTION
149
p. 13
Southerland 1319 West Prohibits combining business entities
for
purposes of determining experience ratings
based on percentage of ownership interest
or supervisory control.
1762
p. 15
Kyle 1862 Shepard Authority of Commr Commerce & Ins. to
promulgate rules limited to subsection (c) -
intent is to make rulemaking authority
applicable to only work comp instead of all
property & casualty insurance.
2171
p. 16
Kyle 1813 McDonald Eliminates repeal of advisory prospective
loss costs
2241
p. 17
Kyle 2322 Odom Includes any filing affecting rates
mandated by federal law in definition of
advisory prospective loss costs; requires
these filings to be referred to WCAC
COVERAGE
pp. 19 - 28
SB# Sponsor HB# Sponsor DESCRIPTION
253
p. 19
Haynes 73 Turner, M Prohibits illegal aliens from receipt of
workers compensation benefits
366
p. 24
Southerland 655 Hawk Prohibits illegal aliens from receipt
of
workers compensation benefits
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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MEDICAL
RECORDS
pp. 29 - 30
SB# Sponsor HB# Sponsor DESCRIPTION
313
p. 29
Finney, R 247 Hensley Increases charge for medical report
from
$10.00 to $20.00
1474
p. 30
McNally 1518 Hackworth Adds other approved provider as
entities
protected from liability for producing
medical records without consent of
employee/patient
MEDICAL FEE
SCHEDULE
pp. 31 - 33
SB# Sponsor HB# Sponsor DESCRIPTION
445
p. 31
Burchett 454 Hackworth Prohibits negotiated commercial
health
insurance contracts to be applied in
workers compensation.
WORKERS
COMPENSATION
BENEFITS
pp. 34 - 5 2
SB# Sponsor HB# Sponsor DESCRIPTION
322
p. 34
Haynes 1818 Hackworth Permits Commr of Labor/WFD or
designee to order work comp benefits paid
equally by 2 carriers (self-insureds) when
claim is compensable and there is dispute
as to had coverage
425
p. 37
Crutchfield 1822 Buck Prohibits social security offset from
applying to death benefits; requires copies
of all information available to specialist
related to request for assistance to be
provided to the parties
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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849
p. 39
Kilby 1073 Turner, M Beryllium - Makes occupational diseases
covered by 2000 federal act [parts
(B)(D)(E)] a compensable state work comp
claim (all presumptions, etc of federal act
are to be used in state claim);
>positive determination in federal case to
be conclusive proof of causation in state
claim;
>exempts second injury fund, state
employees and municipal and county
employees (if accepted work comp law)
>excludes medical benefits
>provides claims not to be included in
experience rating for employer
857
p. 41
Kilby 643 Turner, M Beryllium - same as SB849, except part
(D) not included [part (D) no longer in the
Federal Act]
1044
p. 43
Finney, L 1081 Turner, M Changes definition of maximum total
benefit to be 400 times 100% of states
average weekly wage except in instances
of TTD and PTD
1672
p. 45
Ramsey 278 Mumpower Deletes reference to subsection (13) of
50-
6-102 as definition of maximum total
benefit
1775
p. 46
Southerland 2128 Fitzhugh Multiplier caps applicability to
be
measured by whether employee returned to
work at any job at same/equal pay
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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1797
p. 49
Southerland 2129 Fitzhugh >Changes 2004 act language related
to
inability of employee to settle issue of
future medicals-will permit court or dept to
permit settlement if in best interests of all
parties to do so;
>Adds definition of repetitive injury -
>For repetitive injuries burden of proof
changed to clear and convincing evidence
instead of preponderance of evidence
LABOR & WFD
SPECIALISTS,
MIRR
PROGRAM
pp. 53 - 58
SB# Sponsor HB# Sponsor DESCRIPTION
1477
p. 53
Tracy 1568 Curtiss Prohibits additional information to be
considered by administrator or designee
when specialist order is reconsidered;
requires administrator/designee to
determine if specialists order was correct
and, if not, to issue order stating correct
resolution; prohibits remand of matter to
specialist; provides any party can re-submit
request for assistance based on new or
additional information
1805
p. 55
Tracy 1569 Curtiss >Prohibits specialist from ordering
temporary or medical benefits unless order
is issued determining injury to be
compensable or that benefits are required
by prior court order or settlement
>Amends statute regarding MIRR
>Requires department to advise employee
of the right to request MIRR
>Requires Commissioner of Labor/WFD
to amend current rules
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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LABOR & WFD
BILL
pp. 59 - 60
SB# Sponsor HB# Sponsor DESCRIPTION
2259
p. 59
Kyle 2397 Turner, M.;
Odom
Makes certain technical corrections to
remove outdated references; changes law
to permit specialist to approve attorney
fees above the current statutory maximum
for dept. approval - makes 20% fee
deemed reasonable.
WORKERS
COMPENSATION
ADVISORY
COUNCIL
pp. 61 - 65
SB# Sponsor HB# Sponsor DESCRIPTION
446
p. 61
Burchett 1635 Ferguson Requires one employer representative
on
Advisory Council to be representative from
self-insured pools
1043
p. 62
Finney, L 595 Turner, M Makes chairs (or co-chairs) of
standing
committees ex officio members of
Advisory Council; deletes chair/co-chair of
Joint Committee as ex officio members
1222
p. 63
Cooper 1571 Curtiss Deletes the four ex officio members of
the
Advisory Council (chair and co-chair of
special joint committee on workers
compensation, commissioner of labor and
workforce development and commissioner
of commerce and insurance) AND requires
filing of rate service organizations rules
with the Advisory Council
1473
p. 64
Tracy 1563 Curtiss Makes housekeeping changes to workers
compensation statute
1884
p. 65
Jackson 1138 Buck Requires Commissioner of Labor/WFD to
submit proposed revisions to claims
handling standards to Advisory Council
and Joint Committee - Council has 45 days
to comment
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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*SB 149 by Southerland / HB 1319 by West
Present Law
There is no current statute that is applicable to the exact
subject matter of this bill.
TCA 56-5-320 authorizes the Commissioner of Commerce and
Insurance to designate a rate serviceorganization to assist in
gathering, compiling and reporting relevant workers
compensationinsurance statistical information. Tennessees
designated rate service organization is the NationalCouncil on
Compensation Insurance (NCCI). The statute requires each workers
compensationinsurer to:
< be a member of NCCI;< report its workers compensation
insurance experience to NCCI;< adhere to the policy forms and
rating rules filed by NCCI;< adhere to the uniform
classification system and uniform experience and retrospective
rating plans filed by NCCI and approved by the Commissioner.
In addition, subject to the approval of the Commissioner, NCCI
is required to develop and file rulesreasonably related to the
recording and reporting of data pursuant to the uniform statistical
plan,uniform experience rating plan and the uniform classification
system.
The NCCIs experience rating plan rules include a provision for
the combination of businesses withthe same majority ownership to
determine the experience rating modification factor that is used
inthe calculation of workers compensation premiums.
Proposed Change
SB 149 / HB 1319 adds a new section to Title 56 (Insurance),
Chapter 5 (Rates and RatingOrganizations, Part 3 (General
Provisions). The bill requires the experience rating of each
businessto be based on the nature of the business, the business
loss run history and any other factor relevantto the business. The
bill prohibits combining business entities (based on the percentage
of ownershipinterest or upon supervisory control exercised over the
businesses) for purposes of determiningexperience ratings.
Practical Effect
The bill statutorily amends the experience rating plan rules,
originally filed in 1940, by theTennessee authorized rate service
organization, NCCI, and which are approved by the Commissionerof
Commerce and Insurance. As a result, the bill, by implication,
amends TCA 56-5-320 whichrequires each insurer to follow the
experience rating rules.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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SB 149 / HB 1319,continued.
Informational Note
The NCCI is the designated rate service organization in 33 of
the states. Four states have amonopolistic fund for workers
compensation insurance instead of a competitive market and theother
states have an independent rating bureau within state government.
NCCI is the designated rateservice organization for the states
surrounding Tennessee, with the exception of North Carolinawhich
has its own rating bureau.
The NCCIs combining of entities rule is in place to prevent
employers from taking action for thepurpose of avoiding an
experience rating modification or to apply in situations where
actions aretaken for otherwise legitimate business reasons but
nevertheless result in improper application of theexperience rating
modification.
The NCCI representative, Ms. Cathy Booth, stated this rule is
approved in all states where the NCCIis the authorized rate making
entity. Ms. Booth indicated if the bill is passed it will cause
problemsfor Tennessee employers who have an interstate policy for
their workers compensation insurance.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
EMPLOYEE REPRESENTATIVES:
Othal Smith: Mr. Smith stated he does not support the bill.
INSURANCE COMPANY REPRESENTATIVE:
Jerry Mayo Mr. Mayo stated the bill confuses the issue and the
industry is opposed to thisbill.
EX OFFICIO MEMBERS
James Neeley: Commissioner Neeley indicated the issue is a lot
broader than just workerscompensation regarding the position it
puts the state in.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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SB 1762 by Kyle / HB 1862 by Shepard
Present Law
In 2006, Public Chapter 536 added subsections (c) and (d) to TCA
56-5-320.
Subsection (c) permits the Commissioner of Commerce and
Insurance, after a UAPA hearing, toimpose civil penalties up to
$10,000 against an workers compensation insurer for assessing,
withoutany lawful basis, a premium for individuals who are not
employees or for assessing a premium onthe basis of improper
classification of employees.
Subsection (d) grants the Commissioner of Commerce and Insurance
authority to promulgate rules,including public necessity rules, to
effectuate the provisions of this section. As written andcodified,
Public Chapter granted rulemaking authority related to TCA
56-5-320, which applies toall property and casualty insurance
carriers and is not limited to workers compensation.
Proposed Change
SB 1762 / HB 1862 restricts the rulemaking authority granted by
subsection (d) to rulesimplementing ONLY subsection (c), i.e.,
applicable to only workers compensation. It deleteslanguage that
gave the Commissioner authority to promulgate rules to effectuate
the provisions ofthis section, i.e., the entire section 320 (all
property and casualty insurance).
Practical Effect
This bill appears to be a correction of language of last years
Public Chapter - to make it clear theCommissioner has rulemaking
authority related to the assessing of the civil penalties provided
insubsection (c) - which is limited to only workers compensation
insurance. Therefore, the billdeletes the Commissioners power to
promulgate rules related to entire property and casualtybusiness in
the instance of classification of employees.
Informational Note
Mr. John Morris, Deputy Commissioner of the Department of
Commerce and Insurance, explainedthe Department had recently held a
public hearing on proposed rules for the appeal of
complaintsrelating to the premiums assessed by insurance carriers.
After some negative comments that theproposed rules were not very
relevant to the entire property and casualty market the
Departmentwithdrew the proposed rules. He indicated the Department
wants to work with the sponsors of thelegislation to improve the
language of the bill.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
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SB 2171 by Kyle / HB 1813 by McDonald
Present Law
In 1996, the General Assembly enacted Public Chapter 944 which
made significant changes tovarious laws governing Tennessee workers
compensation, including the pricing of workerscompensation
insurance. As a result, since 1996, the workers compensation
insurance market inTennessee has been a competitive pricing system
- specifically, the advisory prospective loss costssystem. The
implementation of the loss costs competitive pricing system was
accomplished byamending various portions of both the workers
compensation law (Title 50, Chapter 6, Part 4) andthe insurance
laws (Title 50, Chapter 5).
The 1996 Act also included a provision that repealed the
sections of the Act that created the losscosts system. The repeal
provision was not codified in the Tennessee Code. As a result of
therepeal provision, the old law of administered insurance pricing
was revived as of July 1, 2001.In 2001, to prevent the repeal of
the loss costs workers compensation insurance pricing system,the
General Assembly enacted Public Chapter 192 to extend the loss
costs system. Public Chapter192 simply amended the language of
Public Chapter 944 (1996) to create a new repeal date of July1,
2007. As in 1996, the repeal provision included in Public Chapter
192 was not codified in theTennessee Code.
Therefore, as a result of these two Public Chapters, the loss
costs system is repealed as of July 1,2007 and the old administered
pricing system becomes law again.
Proposed Change
SB 2141/ HB 1813 eliminates the repeal provisions of the Public
Acts of 1996 and 2001.
Practical Effect
The bill eliminates any repeal provisions related to the
advisory prospective loss costs system inTennessee. Thus, the
competitive pricing system for the workers compensation insurance
marketin Tennessee will continue without any automatic repeal
provisions.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
All the Council members favor the continuation of the advisory
prospective loss costs system.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-17-
SB 2241 by Kyle / HB 2322 by Odom
Present Law
Section 302 of Title 56 (Insurance), Chapter 5 (rates and rating
organizations) is the definitionsection. Subdivision (12) defines
advisory prospective loss costs: ...historical aggregate lossesand
loss adjustment expenses projected through development to their
ultimate value and throughtrending to a future point in time....
The subdivision also states what is not included in thedefinition:
it does not include provisions for profit or for expenses other
than loss adjustmentexpenses.
TCA 50-6-402 requires the Commissioner of Commerce and Insurance
to consult with the WorkersCompensation Advisory Council before
approving any workers compensation loss costs filing madeby the
designated rate service organization.
Proposed Change
SB 2241 / HB 2322 adds language to the definition of advisory
prospective loss costs to include anyother filing concerning or
affecting rates and ratemaking purposes that are mandated by
federal law.The bill also amends 50-6-402 to require consultation
with the Advisory Council concerning losscosts filings or other
such other filings include in the definition of advisory
prospective loss costfiling.
Practical Effect
The bill would include federally mandated filings - such as the
terrorism filing mandated after theevents of September 11, 2001- in
the definition of advisory prospective loss costs and would
requirethe Commissioner of Commerce and Insurance to consult with
the Advisory Council beforeapproving any federally mandated filing.
Informational Note
In the past there has been a question whether the terrorism
filing was actually a loss costs filingthat required the
Commissioner to consult with the Advisory Council. This bill clears
any remainingquestions about that issue.
Advisory Council staff suggests there are possible drafting
errors in section 2 of the bill that shouldbe considered before the
bill is passed: (1) the added phrase should begin with either or
other suchfilings OR or such other filings; (2) the definition used
in TCA 56-5-301(12) is advisoryprospective loss costs NOT advisory
prospective loss cost filing and (3) the phrase shouldprobably be
added after only the first time the word filing appears in the
sentence, instead of afterboth words.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-18-
SB 2241 / HB 2322 , continued.
Informational Note, cont.
If the bill is enacted as drafted, the first sentence of the
subsection will read as follows: (b) Before approving any workers'
compensation loss cost filing or other such otherfilings included
in the definition of advisory prospective loss cost filing made
bythe designated rate service organization pursuant to this part or
title 56, thecommissioner of commerce and insurance shall consult
with the advisory council onworkers' compensation concerning such
filing or other such other filings includedin the definition of
advisory prospective loss cost filing.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
EX OFFICIO MEMBERS
Leslie Newman: Mr. John Morris, Deputy Commissioner of the
Department ofCommerce and Insurance, indicated it was the
departments opinionthat federally mandated filings are loss costs
filings but this billmakes it clear statutorily they will be
included in the definition.
All the members of the Advisory Council spoke favorably toward
the bill.
http:///tennessee/lpext.dll?f=FifLink&t=document-frame.htm&l=jump&iid=tncode&d=t.%2056&sid=7fed0e6e.6b0b403.0.0
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-19-
SB 253 by Haynes / HB 73 by Turner, M.
Note: This bill is identical to SB366(Southerland)/HB655
(Hawk).
Present Law
TCA 50-6-102(10)(A) defines employee to include every person,
including a minor, whetherlawfully or unlawfully employed. (Prior
to 1961, the law did not include the words whether lawfullyor
unlawfully employed following the word minor.) In addition, the
definition section stateswhen the employee is dead, any reference
to an employee shall include the employees legalrepresentatives,
dependents and other persons to whom compensation may be payable
under theworkers compensation law.
TCA 50-6-103 requires every employee that is subject to the
workers compensation law to acceptcompensation without regard to
fault as a cause of the injury or death. TCA 50-6-106 and
107include certain employments that are not covered by Tennessee
workers compensation law:
common carriers in interstate business that are federally
regulated;
casual employments (one not employed in the usual course of
trade, business,profession or occupation of the employer);
farm or agricultural laborers and employers of such
laborers;
those employers who regularly employ less than 5 employees -
except for those in theconstruction industry (1 employee) or coal
mining (1 employee);
state, county or municipal employees, unless the entity has
accepted the provisionsof the workers compensation law;
voluntary ski patrol person who receive no compensation other
than meals, lodgingor use of the ski lift facilities.
Proposed Change
SB 253 / HB 73 amends the code section that lists the types of
employments not covered byTennessee workers compensation law to
provide that Tennessee workers compensation law doesnot apply to an
alien - unless the alien was:
lawfully admitted for permanent residence at the time such
services wereperformed;
lawfully present for the purposes of performing such services;
or
was permanently residing in the United States under color of law
at the time theservices were performed.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-20-
SB 253 / HB 73, continued.
Proposed Change, cont.
The bill also provides that any data or information that is
required of persons applying for benefitsto determine eligibility
must be required of all applicants of benefits and declares that in
order todeny benefits, the decision must be based on a
preponderance of the evidence.
Practical Effect
It has been public policy in Tennessee since the implementation
of the workers compensation statutein 1919 that the exclusive
remedy for an employee injured on the job is workers
compensationbenefits. This bill, if enacted, goes outside the
exclusive remedy public policy of Tennessee.
The bill prohibits payment of workers compensation benefits to
an injured employee who is notlawfully in the United States. The
bill will deny benefits even though the employer may havepurchased
workers compensation insurance coverage that included the
undocumented or illegalemployee in the payroll on which the premium
was based. Assuming the Tennessee employer wasunaware the employee
was not legally in the United States, the bill results in the
following:
the employer will have paid workers compensation premiums to an
insurancecompany that will not have to pay benefits under the
insurance policy;
the employer is subject to being sued by the employee in tort as
the exclusive remedyof workers compensation will no longer apply
and the liability insurance companieswill have to defend tort
actions filed against the employers and pay any judgments;
there will be uncompensated medical care to injured workers
which will have to bemanaged by the medical community or other
public resources;
although unintended, the result may be to encourage employers to
hire workers whomthey know are undocumented/illegal workers.
Tennessee law creates an incentive for an employer to bring
injured workers back to work bylimiting the amount of permanent
partial disability benefits payable to the worker (1.5 times
theimpairment rating). If the employer does not bring the injured
worker back to work the employee canobtain permanent disability
benefits up to 6 times the impairment rating. The employer is faced
witha real problem if it is learned for the first time after injury
that the worker is undocumented/illegal.The employer is not
permitted - by Federal law - to bring the employee back to the
pre-injury job.Thus, the employer is not permitted to limit its
liability for PPD benefits to 1.5 times the impairmentrating. Some
states have restricted the right to rehabilitation services in
these situations.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-21-
SB 253 / HB 73, continued.
Informational Note
The language of the bill tracks almost exactly the language in
Title 50, Chapter 7 related tounemployment insurance law. Tennessee
unemployment benefits are not payable to aliens who arenot lawfully
in the United States.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
EMPLOYEE REPRESENTATIVES:
Jerry Lee:
Othal Smith: Mr. Smith stated, in his opinion, this is a bad
bill because if itpasses and the employee is permitted to sue the
employer in tort, andthis opens a tremendous amount of exposure for
the employer. Inaddition, it is a problem already for ordinary
English speakingemployees to successfully prosecute a workers
compensation claim,let alone a tort action. He stated, They
(illegal aliens) are here; theyare working; they should get workers
compensation benefits; theemployer pays premium based on the wages
paid to the employee andit does not matter where they come
from.
Mr. Smith did not agree with Mr. Pitts concerns regarding the
PPDcaps because he thought the employer should have a reason to
lookat the people they hire at the front end of the
employmentrelationship. He does not favor an easy out on the
disability capsissue. He stated he did not think the difference
between a 1.5multiplier cap and a 6 multiplier cap will make much
difference in thesystem. Mr. Smith also stated the employers should
be more carefulto check the employees documents prior to hiring the
worker. Hecontended the bill is drafting a fault bases system into
the no-fault workers compensation system.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-22-
SB 253 / HB 73, continued.
EMPLOYER REPRESENTATIVES:
Bob Pitts: Mr. Pitts stated his concerns with the bill is that
if an undocumentedworker solicits employment from an employer,
knowing they areillegal and not eligible for employment and submits
documents thatappear valid, the employer - when it is learned
following the injurythat the worker is undocumented and cannot be
employed - theemployer will not be permitted to limit his exposure
for permanentpartial disability benefits (using the 1.5 multiplier
cap) by returningthe injured worker to the pre-injury
employment.
ATTORNEY REPRESENTATIVES:
Gregg Ramos (TBA): Mr. Ramos stated, in his opinion, the
Tennessee workerscompensation law, since 1961, has included the
words, whetherlawfully or unlawfully employed following the words
any person.He stated he has successfully argued for years that this
phrasemandates workers compensation coverage for all
immigrantsworking in Tennessee, whether documented or
undocumented.
Mr. Ramos pointed out that if this bill is passed, the employer
willlose the exclusive remedy rule and will lose protection from
punitivedamages. Also, the bill encourages employers to hire
undocumentedworkers and pressure them not to submit claims for
injuries on thejob.
Mr. Ramos also stated the employer pays insurance premiums and
theclaim will be denied by carriers and this underscores a windfall
toinsurance companies. He said the insurance company should
screenthe employees status at the beginning when the insurance
ispurchased by the employer.
Mr. Ramos agreed that Mr. Pitts had a legitimate concern with
theapplication of the PPD caps when the employer is not permitted
underFederal law to return the employee to pre-injury
employment.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-23-
SB 253 / HB 73, continued.
ATTORNEY REPRESENTATIVES, cont.
Mr. Ramos, cont. With regard to the issue of the multiplier
caps, Mr. Ramos saidemployers can introduce evidence of
undocumented worker status asevidence of a decrease in the
employees permanent partial disability.
INSURANCE COMPANY REPRESENTATIVE:
Jerry Mayo Mr. Mayo stated the insurance company will not reap a
windfall forinsurance provided to the employer of an undocumented
worker.Whatever is not paid for workers compensation benefits will
be paidfor defense costs on the tort side.
Mr. Mayo said the industry opposes the bill. He indicated this
billaddresses a political issue and a federal issue that the
sponsors aretrying to solve by amending the workers compensation
law. Mr.Mayo indicated he agreed, if the employer is paying
premiums for theworker, the employer should get the coverage and
the worker shouldget the benefits.
HEALTH CARE PROVIDER REPRESENTATIVES:
Sam Murrell, M.D.: Dr. Murrell stated the health care community
is not in favor of thebill.
EX OFFICIO MEMBERS
James Neeley: Commissioner Neeley expressed reservations about
the bill becausepublic policy in Tennessee, since the adoption of
workerscompensation, has been that workers compensation is the
exclusiveremedy for a worker injured on the job.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-24-
SB 366 by Southerland / HB 655 by Hawk
Note: As this bill is identical to SB253/HB73, the analysis will
be identical.
Present Law
TCA 50-6-102(10)(A) defines employee to include every person,
including a minor, whetherlawfully or unlawfully employed. (Prior
to 1961, the law did not include the words whether lawfullyor
unlawfully employed following the word minor.) In addition, the
definition section stateswhen the employee is dead, any reference
to an employee shall include the employees legalrepresentatives,
dependents and other persons to whom compensation may be payable
under theworkers compensation law.
TCA 50-6-103 requires every employee that is subject to the
workers compensation law to acceptcompensation without regard to
fault as a cause of the injury or death. TCA 50-6-106 and
107include certain employments that are not covered by Tennessee
workers compensation law:
common carriers in interstate business that are federally
regulated;
casual employments (one not employed in the usual course of
trade, business,profession or occupation of the employer);
farm or agricultural laborers and employers of such
laborers;
those employers who regularly employ less than 5 employees -
except for those in theconstruction industry (1 employee) or coal
mining (1 employee);
state, county or municipal employees, unless the entity has
accepted the provisionsof the workers compensation law;
voluntary ski patrol person who receive no compensation other
than meals, lodgingor use of the ski lift facilities.
Proposed Change
SB 253 / HB 73 amends the code section that lists the types of
employments not covered byTennessee workers compensation law to
provide that Tennessee workers compensation law doesnot apply to an
alien - unless the alien was:
lawfully admitted for permanent residence at the time such
services wereperformed;
lawfully present for the purposes of performing such services;
or
was permanently residing in the United States under color of law
at the time theservices were performed.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-25-
SB 366 / HB655 , continued.
Proposed Change, cont.
The bill also provides that any data or information that is
required of persons applying for benefitsto determine eligibility
must be required of all applicants of benefits and declares that in
order todeny benefits, the decision must be based on a
preponderance of the evidence.
Practical Effect
The bill also provides that any data or information that is
required of persons applying for benefitsto determine eligibility
must be required of all applicants of benefits and declares that in
order todeny benefits, the decision must be based on a
preponderance of the evidence.
It has been public policy in Tennessee since the implementation
of the workers compensation statutein 1919 that the exclusive
remedy for an employee injured on the job is workers
compensationbenefits. This bill, if enacted, goes outside the
exclusive remedy public policy of Tennessee.
The bill prohibits payment of workers compensation benefits to
an injured employee who is notlawfully in the United States. The
bill will deny benefits even though the employer may havepurchased
workers compensation insurance coverage that included the
undocumented or illegalemployee in the payroll on which the premium
was based. Assuming the Tennessee employer wasunaware the employee
was not legally in the United States, the bill results in the
following:
the employer will have paid workers compensation premiums to an
insurancecompany that will not have to pay benefits under the
insurance policy;
the employer is subject to being sued by the employee in tort as
the exclusive remedyof workers compensation will no longer apply
and the liability insurance companieswill have to defend tort
actions filed against the employers and pay any judgments;
there will be uncompensated medical care to injured workers
which will have to bemanaged by the medical community or other
public resources;
although unintended, the result may be to encourage employers to
hire workers whomthey know are undocumented/illegal workers.
Tennessee law creates an incentive for an employer to bring
injured workers back to work bylimiting the amount of permanent
partial disability benefits payable to the worker (1.5 times
theimpairment rating). If the employer does not bring the injured
worker back to work the employee canobtain permanent disability
benefits up to 6 times the impairment rating. The employer is faced
witha real problem if it is learned for the first time after injury
that the worker is undocumented/illegal.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-26-
SB 366 / HB655 , continued.
Practical Effect, cont.
The employer is not permitted - by Federal law - to bring the
employee back to the pre-injury job.Thus, the employer is not
permitted to limit its liability for PPD benefits to 1.5 times the
impairmentrating. Some states have restricted the right to
rehabilitation services in these situations.
Informational Note
The language of the bill tracks almost exactly the language in
Title 50, Chapter 7 related tounemployment insurance law. Tennessee
unemployment benefits are not payable to aliens who arenot lawfully
in the United States.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
EMPLOYEE REPRESENTATIVES:
Othal Smith: Mr. Smith stated, in his opinion, this is a bad
bill because if itpasses and the employee is permitted to sue the
employer in tort, andthis opens a tremendous amount of exposure for
the employer. Inaddition, it is a problem already for ordinary
English speakingemployees to successfully prosecute a workers
compensation claim,let alone a tort action. He stated, They
(illegal aliens) are here; theyare working; they should get workers
compensation benefits; theemployer pays premium based on the wages
paid to the employee andit does not matter where they come
from.
Mr. Smith did not agree with Mr. Pitts concerns regarding the
PPDcaps because he thought the employer should have a reason to
lookat the people they hire at the front end of the
employmentrelationship. He does not favor an easy out on the
disability capsissue. He stated he did not think the difference
between a 1.5multiplier cap and a 6 multiplier cap will make much
difference in thesystem. Mr. Smith also stated the employers should
be more carefulto check the employees documents prior to hiring the
worker. Hecontended the bill is drafting a fault bases system into
the no-fault workers compensation system.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-27-
SB 366 / HB655 , continued.
EMPLOYER REPRESENTATIVES:
Bob Pitts: Mr. Pitts stated his concerns with the bill is that
if an undocumentedworker solicits employment from an employer,
knowing they areillegal and not eligible for employment and submits
documents thatappear valid, the employer - when it is learned
following the injurythat the worker is undocumented and cannot be
employed - theemployer will not be permitted to limit his exposure
for permanentpartial disability benefits (using the 1.5 multiplier
cap) by returningthe injured worker to the pre-injury
employment.
ATTORNEY REPRESENTATIVES:
Gregg Ramos (TBA): Mr. Ramos stated, in his opinion, the
Tennessee workerscompensation law, since 1961, has included the
words, whetherlawfully or unlawfully employed following the words
any person.He stated he has successfully argued for years that this
phrasemandates workers compensation coverage for all
immigrantsworking in Tennessee, whether documented or
undocumented.
Mr. Ramos pointed out that if this bill is passed, the employer
willlose the exclusive remedy rule and will lose protection from
punitivedamages. Also, the bill encourages employers to hire
undocumentedworkers and pressure them not to submit claims for
injuries on thejob.
Mr. Ramos also stated the employer pays insurance premiums and
theclaim will be denied by carriers and this underscores a windfall
toinsurance companies. He said the insurance company should
screenthe employees status at the beginning when the insurance
ispurchased by the employer.
Mr. Ramos agreed that Mr. Pitts had a legitimate concern with
theapplication of the PPD caps when the employer is not permitted
underFederal law to return the employee to pre-injury
employment.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-28-
SB 366 / HB655 , continued.
ATTORNEY REPRESENTATIVES, cont.
Mr. Ramos, cont. With regard to the issue of the multiplier
caps, Mr. Ramos saidemployers can introduce evidence of
undocumented worker status asevidence of a decrease in the
employees permanent partial disability.
INSURANCE COMPANY REPRESENTATIVE:
Jerry Mayo Mr. Mayo stated the insurance company will not reap a
windfall forinsurance provided to the employer of an undocumented
worker.Whatever is not paid for workers compensation benefits will
be paidfor defense costs on the tort side.
Mr. Mayo said the industry opposes the bill. He indicated this
billaddresses a political issue and a federal issue that the
sponsors aretrying to solve by amending the workers compensation
law. Mr.Mayo indicated he agreed, if the employer is paying
premiums for theworker, the employer should get the coverage and
the worker shouldget the benefits.
HEALTH CARE PROVIDER REPRESENTATIVES:
Sam Murrell, M.D.: Dr. Murrell stated the health care community
is not in favor of thebill.
EX OFFICIO MEMBERS
James Neeley: Commissioner Neeley expressed reservations about
the bill becausepublic policy in Tennessee, since the adoption of
workerscompensation, has been that workers compensation is the
exclusiveremedy for a worker injured on the job.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-29-
SB 313 by Finney, R. / HB 247 by Hensley
Present Law
TCA 50-6-204(a)(1) requires a physician to furnish to the
employer, insurer, employee oremployees attorney, upon request, a
complete medical report at a charge not to exceed $10.00 if
thereport is 20 pages or less in length. If it is longer than 20
pages, the charge is limited to 25 cents perpage.
Proposed Change
SB 313 / HB 247 changes the minimum charge from $10.00 to
$20.00.
Practical Effect
The bill increases the charges for a medical report.
Informational Note
A charge for the medical report required by this section of the
workers compensation law was addedin 1988 by Public Chapter 525
(effective March 3, 1988). The charge was set at $5.00 for the
first20 pages plus 25 cents per page after the first 20 pages.
Prior to that no charge was set by statute.In 1989, the amount of
the charge for the initial 20 pages of a report was increased to
$10.00 (PublicChapter 446, effective May 29, 1989). The amount per
page over 20 pages remained at 25 cents perpage.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-30-
SB 1474 by McNally / HB 1518 by Hackworth
Present Law
TCA 50-6-204(a)(2)(B) provides that the employees consent is not
required to produce medicalrecords related to a workers
compensation claim at the request of the employer, insurer,
employeeor employees attorney. A physician or hospital is protected
from liability for producing the medicalrecords without
consent.
Proposed Change
SB 1474 / HB 1518 adds or other approved provider to the
protection from liability afforded tophysicians and hospitals.
Practical Effect
The bill clarifies that any approved medical care provider is
going to be protected from liability ifthey produce medical records
without the employees consent.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-31-
SB 445 by Burchett / HB 454 by Hackworth
Present Law
TCA 50-6-204(i), enacted in 2004, authorized the Commissioner of
Labor/WFD to establish aMedical Fee Schedule. The Medical Fee
Schedule has been in effect since 2005 and it sets anamount per
service that is a cap - i.e., the employer/insurer may negotiate to
pay less than the amountauthorized by the Medical Fee Schedule.
However, a medical care provider cannot charge more thanthe Medical
Fee Schedule and the employer/insurer is not permitted to pay more
than the MedicalFee Schedule authorized charge.
Proposed Change
SB 445 / HB 454 prohibits payment of fees lower than the Medical
Fee Schedule unless there is aspecific contract between the health
care provider and the employer, trust, pool or insurer. Itprohibits
the assigning of the negotiated rates in the contract to any other
party. If there is nocontract between the specific medical care
provider and the insurer/employer then the payment willbe at the
rates established by the Medical Fee Schedule. The bill
specifically prohibits fees paid toa workers compensation medical
provider that are based on a contract or agreement negotiated ona
commercial health insurance product line - UNLESS the contract
clearly states the rates payableunder commercial health insurance
will also apply to workers compensation services.
Practical Effect
The bill, as drafted, requires the contract for reimbursement
for services to be directly between theemployer/pool, etc. and the
health care provider. This bill would, therefore, prohibit
longestablished, on-going contractual arrangements where the
employer/trust/pool or employer hascontracted with a preferred
provider organization to pay medical claims based on a
contractnegotiated between the third party PPO and health care
providers regarding the amounts they willcharge for their
services.
The bill does make it clear that insurance companies and
employers (trust or pool) are not permittedto apply a contract for
general health services negotiated with a health care provider to
workerscompensation services unless the contract specifically
permits the action.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-32-
SB 445 / HB 454, continued.
Informational Note
Anecdotal evidence indicates there are insurance companies that
have been using contracts they havenegotiated for reimbursement in
the general health insurance arena for reimbursement of
workerscompensation services even though no contract to do so
exists with the medical care provider. Thishas become a problem for
providers who receive payments based on negotiated health
insurancenetworks and this reimbursement is often lower than the
Medical Fee Schedule reimbursement rates.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
ATTORNEY REPRESENTATIVES:
Tony Farmer (TTLA): Mr. Farmer stated he believes the bill is
intended to address anongoing problem in Knox County where an
employer authorizes aphysician to provide treatment to an injured
worker and the physicianbills for the services at the maximum rate
allowed by the medical feeschedule. The insurance company then
refuses to pay the maximumrate and says it has not authorized
payment of the maximum rate. Hebelieves the bill provides that
unless the employer or insurer has andifferent agreement with the
physician, then the employer/insurer hasto pay the maximum rate
authorized by the medical fee schedule. Hedoes agree there may be
some unintended ramifications as outlinedby Commissioner Neeley and
other council members related to thirdparty contracts.
INSURANCE COMPANY REPRESENTATIVE:
Jerry Mayo Mr. Mayo says the bill will hurt self-insured
employers as it preventsutilization of PPOs.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-33-
SB 445 / HB 454, continued.
COMMENTS OF ADVISORY COUNCIL MEMBERS, cont.
HEALTH CARE PROVIDER REPRESENTATIVES:
Sam Murrell, M.D.: Dr. Murrell says this is a real problem for
the medical care providers.The insurance companies are reimbursing
a doctor/provider based ona negotiated network contract that
applies to general health and theprovider has not agreed to accept
less than the amount allowed underthe medical fee schedule. Dr.
Murrell also noted a problem withreimbursement for the correct
charge for a board certified physician;the carriers are reimbursing
at rates permitted for non-board certifiedphysicians.
Dr. Murrell also stated there is a problem where a network
isdeveloped for health treatment in non-workers compensation
mattersand the network wants to apply that contract to any later
developednetworks later developed for workers compensation.
EX OFFICIO MEMBERS
James Neeley: Commissioner Neeley stated he believes the bill
addresses silentPPOs (lot of individuals in health care industry in
third tier belowthe medical fee schedule and trying to eliminate
these individuals.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-34-
SB 322 by Haynes / HB 1818 by Hackworth
Present Law
There is currently no provision in the Tennessee Workers
Compensation law that requires disputingcarriers to pay equally the
benefits to the employee and resolve the question of who had
coverageat the end of the claim.
The Department indicated when the Department is made aware of a
situation where two carriers aredisputing who has liability for an
injury, the Department will begin its investigation and
obtainrelevant information from which it can make a decision. If
there is a dispute about compensability,the Department will first
determine that issue. If the injury is not in dispute, after
properinvestigation, the Department issues an order (binding only
for administrative purposes) as to whichcarrier has the liability.
If the carrier that is ordered to pay the benefits disagrees, the
carrier can goto court to obtain a final determination of which
carrier is liable and if the Departments decision wasin error, the
other carrier is reimbursed from the Second Injury Fund the amounts
it paid pursuantto the order.
Proposed Change
SB 322 / HB 1818 adds a new section to the workers compensation
statute. If the followingconditions are met, the Commissioner of
Labor/WFD or designee is authorized to order benefits tobe paid on
an equal basis by carriers/self-insured employers:
compensability is not disputed or a specialist has determined
the claim to becompensable AND
there is a dispute as to which entity is responsible to pay
benefits to the injuredworkers when the
< employer has changed carriers;
< the employer was self-insured and is now insured; or
< the employer who was insured, becomes self-insured
In addition, the bill provides that - upon agreement of the
parties OR a court order as to which entityis responsible to pay
benefits - the one responsible shall reimburse the party who was
not responsibleto pay benefits, all amounts paid to the employee
plus interest.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-35-
SB 322 / HB 1818 , continued.
Practical Effect
The bill will permit an employee to receive payment of workers
compensation benefits before theconclusion of the case when there
is a dispute as to which employer or carrier had coverage at
thetime of the injury. The employers/carriers in question will pay
the benefits equally and uponresolution of the issue, the one who
had coverage must repay the other, with interest.
Informational Note
As drafted, either the parties must finally agree as to who had
coverage or a court must make thedecision.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
EMPLOYEE REPRESENTATIVES:
Othal Smith: Mr. Smith said this can be very detrimental to an
injured workerwhen two carriers/self-insured employers are
disputing who isresponsible for payment of the claim.
ATTORNEY REPRESENTATIVES:
Kitty Boyte (TDLA): Ms. Boyte indicated there may be a problem
when two carriers arearguing over a gradual injury - under this
circumstance which panelis to apply. It is unclear how you split
the responsibilities of theemployer.
Tony Farmer (TTLA): Mr. Farmer stated it is a problem for
employees because it often takesthe Department several months to
obtain the information it feels isneeded in order to make a
decision as to which entity is liable to paythe workers
compensation benefits. In the meantime, the employeegoes without
medical treatment or indemnity benefits even though theinjury is
not being contested. He said a worker can lose their housewhile
waiting for a decision from the Department.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-36-
SB 322 / HB 1818 , continued.
ATTORNEY REPRESENTATIVES, cont.
Gregg Ramos (TBA): Mr. Ramos said he likes this concept although
the issue as to whosemedical panel is to be used may need to be
addressed.
INSURANCE COMPANY REPRESENTATIVE:
Jerry Mayo Mr. Mayo said injured workers should not be denied
benefits whenthere is no doubt of the compensability. He suggested
the bill shouldbe amended to also provide for reimbursement of all
medicalexpenses paid and all loss adjustment expenses incurred by
thecarrier/self-insured employer in addition to the benefits paid
to theemployee. He also expressed concern if one of the
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-37-
SB 425 by Crutchfield / HB 1822 by Buck
Present Law
Re: Section 1
TCA 50-6-207(4)(A)(I) provides that permanent total disability
benefits are to be paid to theemployee until the employee reaches
the age to be eligible for full social security benefits; or if
theemployee is 60+ years old at the time of injury, the payment of
benefits is for 260 weeks. Thebenefits are reduced by the amount of
any old age insurance benefit payments attributable toemployer
contribution (i.e., 50%). The Tennessee Supreme Court has held the
social security setoffto be applicable to employees over age 60 who
receive permanent partial disability benefits and todeath benefits
received by a spouse.
Re: Section 2
The operating procedures of the Division of Workers Compensation
prohibit the parties fromdiscovering the documents provided by the
other party to a workers compensation specialist in thoseinstance
where assistance is being sought regarding medical or temporary
benefits.
Proposed Change
Section 1 of SB 425 / HB 1822 prohibits the social security
offset from applying to death benefits.
Section 2 of the bill requires copies of all information
available to a workers compensationspecialist when considering
medical or temporary disability benefits to be provided to all
parties,upon request. The bill make it clear this is not applicable
to medication situations when informationmay be held confidential
upon request of a party.
Practical Effect
Section 1 of the bill addresses the Supreme Courts recent
application of the social security offsetto death benefits and
determines the public policy of Tennessee is contrary to the
Supreme Courtsinterpretation of the statute.
Regarding the discovery of information the specialist is
considering when determining temporaryor medical issues, section 2
of the bill makes certain all parties are on the same playing field
byrequiring the sharing of the information which the specialist is
considering when making the decisionas to whether to order
benefits. It permits both employees and employers an opportunity to
providethe specialist with full information upon which to make a
determination of the issue.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-38-
SB 425 / HB 1822, continued.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
ATTORNEY REPRESENTATIVES:
Kitty Boyte (TDLA): Ms. Boyte said the social security offset is
to prevent thereceipt of double benefits.
Tony Farmer (TTLA): Mr. Farmer says it is a real handicap for
both sides in theprocedures for the department to make a decision
when aRequest for Assistance has been submitted. Each side
willpresent its position but has no idea what the other party
hassaid about the claim. This causes significant fairnessproblems
for both sides. The current process provides notransparency.
Gregg Ramos (TBA): Mr. Ramos said he is in favor of both
sections of the bill asthey will improve the entire system.
EX OFFICIO MEMBERS
James Neeley: Commissioner Neeley stated there are approximately
5000requests for assistance received by the department annually.The
average file is about 45 pages. Therefore, there is a fiscalimpact
to the department as a result of Section 2.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-39-
SB 849 by Kilby / HB 1073 by Turner, M.
Present Law
TCA 50-6-302 pertains to occupational diseases. The current law
does not have any languageregarding specific occupational diseases
except for coal workers pneumoconiosis.
Proposed Change
SB 857 / HB643 applies only to occupational diseases involving a
disease or condition covered bythe federal Energy Employees
Occupational Illness Compensation Program Act of 2000, parts
(B),(D) or (E). The bill makes these diseases or conditions
compensable as an occupational disease forTennessee state workers
compensation benefits. The bill makes positive determination
findingspursuant to the Federal Act conclusive proof as to
causation for a state claim and prohibits anemployer from raising
issues related to: notice, causation, statute of limitations.
The bill provides that it is not applicable to workers
compensation claims made by a state employeeor by a municipal or
county employee, whether it has accepted the Workers Compensation
Act ornot. The bill also provides:
< neither the employee, employees survivors/beneficiaries nor
the employer shall beentitled to make a claim for benefits against
the Second Injury Fund;
< there shall be no entitlement to medical benefits (past,
present or future) for thesediseases or conditions pursuant to TCA
50-6-204;
< state workers compensation awards paid by reason of this
law are not to be includedin the employers experience factors for
changes in the employers loss history to theextent the employer is
reimbursed or indemnified by the federal government forbenefits
paid.
Practical Effect
For those employees (usually an employee of a DOE facility or
the employees survivors orbeneficiaries) who receive a positive
determination in the federal claim for benefits due to
illnessescontracted as a result of work at the employer, it is
conclusively presumed that the illness orcondition is causally
related to the employees occupation and the employer shall be
prohibited fromraising the defenses of notice, causation or statute
of limitations in a claim for state workerscompensation
benefits.
-
Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-40-
SB 849 / HB 1073 , continued.
Practical Effect, cont.
The bill makes it clear that an employee or employer is
prohibited from seeking any recovery againstthe Second Injury Fund
and that employees of the State of Tennessee or
counties/municipalities arenot entitled to state workers
compensation benefits for these diseases or conditions. Finally,
the billprovides that to the extent an employer is reimbursed or
indemnified for state workers compensationbenefits paid pursuant to
this law, the payments are not to be considered in the employers
losshistory for computation of the experience modification
factors.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-41-
SB 857 by Kilby / HB 643 by Turner, M.
NOTE: This bill is the same as SB 849 (Kilby)/HB1073(Turner, M.)
except this bill doesnot have a reference to Part (D) of the
Federal Act. Part(D) no longer is in the Federal Act.However, the
general analysis of the bill remains the same as in the previous
bill. Therefore,the analysis will be repeated here.
Present Law
TCA 50-6-302 pertains to occupational diseases. The current law
does not have any specificlanguage regarding specific occupational
diseases except for coal workers pneumoconiosis.
Proposed Change
SB 857 / HB643 applies only to occupational diseases involving a
disease or condition covered bythe federal Energy Employees
Occupational Illness Compensation Program Act of 2000, parts
(B),(D) or (E). The bill makes these diseases or conditions
compensable as an occupational disease forTennessee state workers
compensation benefits. The bill makes positive determination
findingspursuant to the Federal Act conclusive proof as to
causation for a state claim and prohibits anemployer from raising
issues related to: notice, causation, statute of limitations.
The bill provides that it is not applicable to workers
compensation claims made by a state employeeor by a municipal or
county employee, whether it has accepted the Workers Compensation
Act ornot. The bill also provides:
< neither the employee, employees survivors/beneficiaries nor
the employer shall beentitled to make a claim for benefits against
the Second Injury Fund;
< there shall be no entitlement to medical benefits (past,
present or future) for thesediseases or conditions pursuant to TCA
50-6-204;
< state workers compensation awards paid by reason of this
law are not to be includedin the employers experience factors for
changes in the employers loss history to theextent the employer is
reimbursed or indemnified by the federal government forbenefits
paid.
Practical Effect
For those employees (usually an employee of a DOE facility or
the employees survivors orbeneficiaries) who receive a positive
determination in the federal claim for benefits due to
illnesses
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-42-
SB 857 / HB 643 , continued.
Practical Effect, cont.
contracted as a result of work at the employer, it is
conclusively presumed that the illness orcondition is causally
related to the employees occupation and the employer shall be
prohibited fromraising the defenses of notice, causation or statute
of limitations in a claim for state workerscompensation
benefits.
The bill makes it clear that an employee or employer is
prohibited from seeking any recovery againstthe Second Injury Fund
and that employees of the State of Tennessee or
counties/municipalities arenot entitled to state workers
compensation benefits for these diseases or conditions. Finally,
the billprovides that to the extent an employer is reimbursed or
indemnified for state workers compensationbenefits paid pursuant to
this law, the payments are not to be considered in the employers
losshistory for computation of the experience modification
factors.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-43-
SB 1044 by Finney, L. / HB 1081 by Turner, M.
Present Law
TCA 50-6-102(14)(C) defines maximum total benefit as the sum of
all weekly benefits to whichan employee may be entitled and for
injuries on/after 7-1-1992, the maximum total benefit equals400
weeks times the maximum weekly benefit except in instances of
permanent total disability.
The Supreme Court held in 2005 that the maximum total benefit
limitation is applicable not only topermanent partial disability
benefits but also to temporary total disability benefits. The
maximumtotal benefits calculated by the Court was 400 times the
employees weekly compensation rate.
Proposed Change
SB 1044 / HB 1081 amends TCA 50-6-102(14)(C) by adding a new
provision to apply to injuriesoccurring on/after 7-1-2007. It
defines maximum total benefit to be 400 times 100 % of the
statesaverage weekly wage (SAWW) which is set annually by the
Division of Workers Compensation.In addition, the bill excludes
both temporary total disability and permanent partial disability
fromthe definition of maximum total benefit.
Practical Effect
This bill addresses the Supreme Courts decision, Wausau Ins. Co.
v. Dorsett, 172 S.W.3d 538(Tenn. 2005), that held temporary total
disability benefits are to be included in the calculation ofmaximum
total benefit. In the Dorsett case, the Supreme Court stated:
...this Court has noauthority to alter the statutory definition of
maximum total benefit. Whether this statutory definitionshould be
revised to exclude temporary total disability from the 400-week
limitation is a questionfor the legislature, not the judiciary. In
Dorsett the employee had never reached maximum medicalimprovement
before the expiration of 400 weeks of temporary total disability
benefits. Thus, shewould not have been entitled to any permanent
partial disability at the time she reached maximummedical
improvement.
The bill can be viewed as increasing the maximum total benefit
from that which has been interpretedby the Supreme Court in recent
years (i.e, 400 weeks times the employees compensation rate).
Thebill can also be viewed as returning the law to the original
intent of the definition of maximum totalbenefit as it existed
before the maximum weekly benefit was tied to the states average
weeklywage.
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Workers Compensation Advisory Council Comments re: Workers
Compensation Legislation March, 2007
-44-
SB 1044 / HB 1081, continued.
Practical Effect, cont.
For instance, TCA 50-6-102(14)(A) states the maximum total
benefit for injuries occurring between7-1-90 and 6-30-91 is
$109,200. TCA 50-6-102(15) states the maximum weekly for that same
timeperiod is $273.00. Therefore, it appears if you multiply the
maximum weekly benefit of $273 times400, the result is
$109,200.
COMMENTS OF ADVISORY COUNCIL MEMBERS:
EMPLOYEE REPRESENTATIVES:
Othal Smith: Mr. Smith says he believes the bill places the law
as it wasprior to 1992 and the bill will help only those most
seriouslyinjured workers.
ATTORNEY REPRESENTATIVES:
Tony Farmer (TTLA): Mr. Farmer stated this bill will impact a
very, very smallpercentage of claims (significantly less than 1% of
the claimsmade annually in Tennessee) and of the people it does
impact,it only effects the most seriously injured workers who
areeligible for TTD and PPD for an extended period of time.
Itprotects Tennessees most seriously injured workers.
EX OFFICIO MEMBERS
James Neeley: Commissioner Neeley stated that he remembers when
themaximum benefits were based on the maximum weeklybenefit and the
reforms did not change the law; rather, thecourts interpretation
has changed the law from the statesmaximum weekly rate to the
employees weeklycompensation rate.
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Workers Compensation Advisory Council